Buying a gaming console such as Xbox is not everyone's cup of tea. Surely, Microsoft intends to sell it specifically to gamers and those who want to feel kids at heart. Besides it being expensive, it goes absolutely pricier with the inclusion of additional accessories like controllers.
With these, it's understandable why console makers sometimes generate more loss than profit like in the case of the Redmond giant.
According to Xbox CEO Phil Spencer, the company loses up to $200 for every console they sell to its users.
Xbox is Losing $200 For Every Console Sold
Clutch Points reports that Spencer spoke about the performance sales of the company when it comes to Xbox sales during the Wall Street Journal TechLive event last week.
The Microsoft head of gaming discussed how the company adapts to the changes in pricing amid the economic downturn. He added that for every Xbox console (regardless if it's an Xbox Series X or Xbox Series S), they lose between $100 to $200.
In an interview with WSJ, Spencer expects that Microsoft will sell the additional game accessories and games to alleviate the incurred losses on selling.
It's true that the Xbox consoles won't stick to the fixed pricing, but Spencer remained tight-lipped about the potential changes when it comes to prices.
However, he added that Microsoft will implement an increase in the pricing of the games since Sony already did it with its $70 games.
Selling Consoles at a Loss is Just Normal
According to another report by Kotaku, encountering loss when selling consoles is not a "new practice" in the gaming industry. Like any business, there are low moments that a company would experience especially amid inflation and surging prices.
For instance, there was a time when Sony lost $240 for every PS3 sold. Nintendo has previously experienced it in selling Wii. For every Wii console sold, the Japanese gaming giant only earned $6. Still, it's better compared to hundreds of dollars slipping away from your earning vault.
Apart from selling accessories to make up for the losses, Microsoft hopes that its Xbox Game Pass will help in diminishing the impact on their business.
The company has high expectations for many gamers to continue availing of the service before the year ends. In this way, the $15 monthly subscription, no matter how small, will be a great way to offset the loss.
In the long run, Xbox envisions tweaking the business model to see what good upgrades can be included to improve its sales for the consoles.
With the upcoming holiday season in the next month, people will hurry up to buy discounted games and consoles for the peak period. Spencer said that the price increase won't arrive during the holiday season, but still, it does not mean that we won't see a price hike for some items sold by Microsoft.
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This article is owned by Tech Times
Written by Joseph Henry
